Sierra was captured, then killed, by an accounting fraud (2020)
vice.com
vice.com
Why not?!?
It seems like everyone in this story - Roberta, people who love games, (most especially) the employees who lost their savings, and even Ken - would be happier today if they had continued earning an honest profit doing what they did best. The scramble for more, more, MORE undid them all.
There's wisdom in the proverb "the love of money is the root of all evil". This story is a cautionary tale.
As many people point out, the CEO has some level of fiduciary duty to investors. If you refuse an offer with a 40% or so premium, you are going to be facing down lawsuits.
Finally, while Roberta was enjoying her position, Ken really wanted to quit all of the CEO crap. Finding a CEO to hand things over to is just as fraught as a buyout and probably more likely to bump into bad actors than a buyout.
Put it all together and there really was no good reason to refuse the buyout. If the purchasing company hadn't been a fraud, we'd be lauding the decision to sell instead of castigating it.
not if the offer is all garbage stock
> Ken really wanted to quit all of the CEO crap.
Article contradicts that spending a lot of paragraphs on Ken fighting for position in new company.
>there really was no good reason to refuse the buyout
Nobody looked for one, nobody wanted to find one due to greed. Otherwise they would be balls deep in CUCks books.
I think a simple way to avoid this is to ask for a all-cash offer. Naturally it will be either non-existant or much smaller value. If the offer is still good, it is not a problem to accept it.
The problem here was that the sellers were accepting stock as a payment, which was garbage.
It was plain old accounting fraud.
> And nobody saw it coming.
Nothing to see if you do not look.
> Put it all together and there really was no good reason to refuse the buyout.
He claimed he did it to secure Sierras financial future, but didn't see it as an issue when CUC refused to share its financial data.
It might be a hindsight thing, but it seems that at least nowadays larger companies spend a lot of time going over finances and other economic data before they agree to that kind of deal.
> If the purchasing company hadn't been a fraud
They could have been completely honest and still been in a state where the buyout itself would have been enough to break both. Wouldn't be the first time a company overextended itself.
> Williams wasn’t a game designer, but a visionary who saw the company always moving forward, leading the market with other genres, other software, online worlds connecting every kind of person. That Sierra is instead remembered, basically entirely, for these 2D adventure games from the eighties and nineties is, he says, because the company was killed.
With respect to Ken, I think his ambition outstripped his ability. He prided his company on being something it wasn't, and himself being something he wasn't either. Sierra had to be something big, he had to be something big; his favored fraudster knew exactly how to exploit that self-illusion. In reality, Ken's own wife hints that Ken was struggling as CEO even before selling, e.g. failing to see through people, over-relying on lieutenants when making decisions, etc.
For all the talk of murdering Sierra, I find it interesting Ken doesn't name the culprit. Not the fraudster or his cronies. I think that's because Ken is the one who let them in his house.
If you loved the company, it's a very interesting book.
To be fair to Sierra, some of their final acts were publishing Half Life, Homeworld, and an expansion for Diablo. They may well have become an enormous publisher if not for the CUC mess.
Ken ambitions killed Sierra, Ken wanted that G5. This https://www.youtube.com/watch?v=sr9_GfeoCjk [Tropic Thunder Tom Cruise Dancing to Flo Rida Low] is an accurate reenactment of how Walter Forbes lured Ken Williams into selling
It was "just" an offer with a large premium over the current stock price.
So I suppose if you were sitting on 300k in equity it was now worth 480k, but it's not like going from illiquid paper wealth to a liquidity event...and given the company's growth trajectory it seemed likely at the time that it would get there in a year or two on its own, without a (risky) acquisition.
Dunno, doesn't seem like a slam-dunk case of F-you money to me.
Exits are for founders / top-level guys.
They didn't do it for the personal money, they did it because they thought their shareholders would sue them, at least in part, for turning out a deal that was too good to be true.
Note that I'm not saying that others who don't avoid those things are wrong -- they're not at all. They just have different business goals and priorities than I.
"The love of money is the root of all kinds of evils."
NIV Bible: "For the love of money is a root of all kinds of evil..."
KJV Bible: "For the love of money is the root of all evil..."
Crude translation almost word for word: 'root of all the evil is the greed'.
The translation process would have gone:
1) root of all evil is greed [eliminate non-English articles]
2) greed is root of all evil [swap to SVO syntax]
3) greed is the root of all evil [add required English article]
4) The love of money is the root of all evil ["translate" the vocabulary word into simpler terms]
There simply isn't any more faithful way to render that thought. You could stop at step three, but the KJV's genius lies in what a small vocabulary it uses. (I just checked: "greed" appears nowhere in the KJV, so the word was on the hit list.) The goal was to make the text understandable to the broadest audience possible - the vast majority of whom, at the time, were uneducated. That the translators were able to maintain that constraint while also creating something of incredible literary power is awe inspiring.
If you want to break it down a bit further, the phrasing in step three puts two stressed syllables ("greed is") together, which can be awkward, while the final version puts the verse into an iambic pattern (unstressed syllable preceding a stressed syllable), which rolls off the tongue much easier. The word "evil" then reverses that, which breaks the rhythm and calls attention to the end of the thought. (And, maybe, if you want to get especially literary or theological about it, provides a subtle commentary on the nature of evil.) It's so good.
Hebrew and aramaic doesn't have a word that directly translates to greed, but the meaning of philargyria is related to money rather than the metal and Ecclesiastes obviously describes 'love of silver' as a form of addiction and that's what Paul (or whoever actually wrote the epistle) had in mind when he wrote to Timothy and the jews he hung around with.
I was intrigued by the idea (elsewhere in the thread) that the root difference is translation from the vulgate vs translation from Greek, though I don't have the background to evaluate the claim. Regardless, absent really good reasoning I'll defer to the KJV, for reasons of historical importance and literary quality. So many phrases in the NIV (and other modern versions) set my teeth on edge.
[1] https://www.biblegateway.com/passage/?search=1%20Timothy%206...
"root of all evil" or "root of all evils" would seem to be more precise translations than "root of all kinds of evils".
The Russian Synodal bible gives: ибо корень всех зол есть сребролюбие which would translate to "root of all evils"
> “They hated it,” he remembers of the board’s reaction. “Because we were on a roll. We were unstoppable at that point.” If it was an acquisition where Sierra would retain control, that’d be one thing, but a merger with three major developers under a parent with no software experience? "It was beyond bad inside Sierra."
Fundamentally, dude took stock. Which, unlike cash, made him and the shareholders dependent on ongoing competent execution, from a coupon company that was going to merge multiple software companies and magically continue shipping excellent software. When people asked what expertise does a coupon company have at shipping multiple types of software, it turns out the real answer was their expertise was selling to greedy fools. Pretty good expertise!
Customers love your product? Great, here's a very attractive offer, we buy the company and make it "efficient" which somehow tends to make the product shitty and the customers unhappy.
If this is a problem we want to solve, the answer IMO is stuff like employee-ownership & unions.
Ken Williams tried to innovate into new underserved markets (e.g. dial-up gaming services pre-Internet), and "buy R&D" by acquiring other companies, which worked for a while. But his core founding game designers had been surpassed in the industry, and their location made it very hard to recruit new talent. The shift to higher resolutions and 3D obsoleted their core technology and the technical talent they had just couldn't keep up. (source: there's a few very good long-form interviews with Ken Williams on these business realities).
Sierra was not going to make it as a software house, the writing was on the wall for a while. They tried to switch to using their established sales channels and turned to distributing and did really well for a few titles like Half-Life and Homeworld, but then those companies went elsewhere with the market. By the "end" Sierra itself was mostly making card games, and then blowing most of their budget on buggy, late to market, and underperforming 3D versions of their main series.
Selling the company was really the only alternative for them, but once you do that you give up vision and control.
It's sad how they ended up, and I'm thankful for the memories, but things move on.
I love Sierra games growing up, but I've
come to understand that they were not great
games and often quite user hostile, but
benefited more from being early movers in an
underserved market.
(And I'm somebody who was absolutely enthralled by about a half dozen of their adventure games back in the day)
Even if Ken and Roberta hadn't lost control of the company, I'm not sure what Sierra would have offered the world creatively at that point.
They were eclipsed by LuscasArts in the world of point-and-click adventures, and it's not really clear they had another core competency on the game development side of things. If Phantasmagoria was any indication, they seemed to want to go in the direction of "Digiwood" games with FMV but that whole genre of games turned out to be a massive dead-end for the industry and is not particularly fondly remembered.
I still celebrate Sierra, though. They absolutely moved the industry forward, and were at the pinnacle of the industry for a decade or more. Few have achieved as much, or entertained as many! Roberta in particular is a bit of a hero of mine and on a personal note I love that her and Ken are still together after all these years.
All the games were user hostile back then. You could play a sierra game with hostile user input parsing and really nice graphics for the day. Or you could play another game that was even more hostile but had no graphics or vastly worse graphics, and often with next to no story. Often you had to be a huge nerd to even get the games to run at all. You probably needed to learn a lot about DOS config or how to write .bat files to get sound to work or your graphics to work right. A typical non-nerd consumer would probably never have figured out how to get it to run unless maybe Tech Support was excellent back then. My Dad was an engineer.. no way we'd have ever gotten them to run without his knowledge.
A lot of the negative stuff happened at the very end before they were acquired and then after they were acquired. But even in the early 1990s they had some mega hits.. they just weren't in the original lineup of adventure games. IMO the adventure games never really worked once they started using the mouse. They were less hostile but just seemed dumb. In the early 1990s the Dynamix games Sierra published were great though, those were/are some of my most favorite games from my childhood. What was hostile about those was getting them functioning in Dos though. I remember Metal Tech Earthsiege being a real huge effort with config.sys and autoexec.bat to get the whole game to function.
I wanted to play a lot of these games bad enough to learn more about the computer worked, the hostility probably contributed to me going down the path of studying CS.
I can't really think of a western investor that does the same.
Dunno, if I read the same text, but Williams retired early, and rich. Good reward if you ask me
>tends to make the product shitty and the customers unhappy.
Experimentation, and advancement makes one to step in the wrong direction more often than not, and it's absolutely fine. A product, or a brand may expire, and diminish, but gaming in general does pretty well, and offers more today compared to 90s
Stories like this one and my own experience are the reason why I refuse to accept contracts where stock options are part of compensation package. The agents/hiring managers are quite surprised when I tell them that stock options are just a way to make people work harder for less money. It is a sweet deal for the company and a crap deal for the employee.
It's not the contracts that were the problem -- it was the fact that in those days it was uncommon for rank-and-file employees to really diversify.
We've mostly learned that lesson now.
I agree, except I don't refuse them. I just consider them to be without value when I'm totaling up the compensation offer. If the job isn't worth it without the stock/options, it's not worth it with them.
For Quest of Glory, I'd recommend Hero U: Rogue to Redemption from the Coles, it has a similar feeling and is a load of fun. For me it's the best quest for glory clone since (better than Mage Initiation and Heroine's Quest).
There's been other games by Sierra alumni but they just don't have the same level of polish.
That overwrite tool was handy later when my first C&C:Generals LAN game had my Supertank sniped and stolen.
What keeps me in love with the game is its world-building. Cities like Tarant feel alive in ways that are hard to explain.
That and the choices/consequence/reactivity. Playing as a dumb character and reading the newspaper article about your half-literate nincompoop's Zephyr crash is a true LOL moment.
Microsoft... do something good?
Have you tried using Microsoft products?
They have given me far more than I ever paid them and will continue to do so.
Also: Age of Empires II. Best RTS ever; change my mind.
AoE2 has a lot of micro depth: - quick walling to trap enemy units in or out - each arrow is a projectile that you can dodge - ballistics helps to hit moving targets, still can be dodged by good players
The list goes on. Watch any modern caster for this game (MembTV or T90). There is a lot to enjoy.
What I dislike about Microsoft+AoE is the fact that they publish DLCs with less and less content for huge prices. And AoE mobile is obviously a joke.
You are presuming that units would do as they are told, in a timely manner. Which they do not.
Source: Played AoE2 for decades way back when. Dodging arrows is a skill to be practiced and honed.
I mean, Google's calendar is "good enough" for most things, but shifting a single instance of a meeting, or more interesting repeat cycles is a pain by comparison. Let alone 3rd party integrations.
If I ever came across F-U money, I'd build an open-source outlook+exchange replacement. Probably 3 versions, one for a single domain for easier deployment, one for mid-large companies with multiple backends, and something with more cloud integration/distribution.
I think if cloudflare had workers for TCP services, doing an email service on cloudflare could be awesome.
The about to be closed Arkane Austin and Tango Gameworks were institutions in gaming similar to Sierra. Their franchises probably relegated to the same place in essence.
Although they weren't closed for a good reason, just because the Xbox executives decided to spend the entire company's budget buying Blizzard and now finance is making them actually pay for that.
All of it? I thought the EarthSiege / Metaltech / Tribes Universe ended up with Hi-Rez Studios, but none of that is even on their website any more.
* Police Investigations * High Fantasy * Fairy Tale Fantasy * Sci-Fi Comedy * Adult Comedy * Arcade Games * Educational Games * Card and Casino Games
* and then had a subsidiary pretty much devoted to 3d Simulation and Action games.
and did all of those, including multiple sequels, in the space of less than 15 years.
The lack of rules also bit Sierra later on as players encountered more games from other creators and we slowly realized how unplayable many of the Sierra games actually were. But for the period where they dominated, they were kind of a wonderland.
Memory: I basically learned how to type playing Police Quest and Space Quest II.
Same here. I recall playing Quest for Glory 2 and becoming very quick at typing "ask about ...". Pausing the game when the user brought up the typing window was such an innovation for me haha
- Don't let untrustworthy people in positions of confidence without controls and oversight
- Don't sell to untrustworthy parties
- Don't go public
- Don't take counsel of MBAs out to make a buck
- Listen
- Be cautious
It's incredibly hard to have the timing, build the team, and reach such a magic state of success. Guard it well and don't sell out so easily.
I've come to believe that it's very hard for people to not listen to the voice of greed in their mind. I also believe that as people become more wealthy, they tend to become more greedy. It's a fight against human nature and I don't think many people are well enough in control of themselves in this regard. Maybe someone like Keanu Reaves (from what I've read), but people like him are very few I think ...
So arresting the partners involved in this makes sense, as it is more like a group of individual rainmakers working under one brand rather than a traditional company.
And my friend didn't join, instead he switched to small firm where their employees were like strike-force mercenaries. He had a specialised skillset and was willing to move anywhere for a year at a time. Wound up going from ~$150k in 2008 money to over $400k with the insane travel sacrifice schedule, overtime, etc. He is still there but manages the young people doing that while working from home, and makes good money still.
I own a highly profitable small-ish business where I want longterm employees, but my incentive is staggering payments so your profits balloon after staying 5 years, but then you have to wait 7 more years to get all of your profits, so each year you get another 7 year profit vesting. So the handcuffs are very reinforced to prevent people leaving. Some people still leave though, but very small turnover at the VP / senior leadership level.
The story feels like it bears some similarity to the Dark Quiet Death episode from Mythic Quest. The video game industry, the husband-and-wife team, the rollercoaster of success and failure. Maybe just a coincidence. If you haven't seen it, it's a very good (and very sad) stand-alone episode. https://www.imdb.com/title/tt10084334/
https://www.imdb.com/title/tt10084334/trivia/?ref_=tt_trv_tr...
* Monument Valley
* I Love Hue
* Battle of Polytopia
* Grand Mountain Adventure
* Tiny Bubbles
* Kingdom Rush
* Planes Control
* Human Resource Machine
An either thread: https://news.ycombinator.com/item?id=24941667
In Pharaoh, you would manage the economy of an ancient Egyptian city and could build monuments and pyramids.
It's interesting to hear that there was more to the story here.
Very sad.
In the end I printed it to PDF and read that.
> Kirk Shelton was sentenced to 10 years and the same amount in restitution.
How can someone destroy a company like Sierra Online that touched millions of lives and ever get out of prison?
A better system would be to standardize a number of dollars of fraud is equal to a day is jail, and then just do the math to determine the jail time.
I’m surprised that the BoP is so relaxed about prisoner privacy, also that there hasn’t been a reality TV show in this prison.
There’s no such thing, at least not in terms of who is in what prison. Courts determine prison sentences, and since court records are public, prison records are public. If you know the name of an inmate you can find out what their sentence is, where they are incarcerated, expected release date, etc.
Financial crimes should be scaled so the penalties for doing $10M in damage are equivalent to 1 dead person. Do a billion in damage? You’re going away forever, the same as someone who sets off a bomb killing a hundred people.
I think we’d solve a lot of our problems if we accepted money as life-equivalent in both directions, ie, not only as a value when a wrongful death occurs.
There is no singular "the value of life". There are numbers which some people use in very specific circumstances. Prices for life are subjective. I would say mine is priceless, and might say yours is much cheaper.
When you take someones life, they don't have a chance to put a price to it.
If you lose your money you are still alive. If you lose your life, you lose the money too.
For the US, preventing highway deaths is valued at roughly $13 Million[1], which is probably what GP is thinking of; the government has confidence that for every $13MM it spends on highway safety, it can save 1 life, on average, so a new safety measure that costs less than this per life saved is a win, and a new safety measure that costs more than this per life saved is a loss.
I'm sure in other contexts there are other numbers; there is no reason to think that safety interventions in e.g. mines or factories or hospitals should cost the same. Similarly if you've talked to a member of the Effective Altruism community for more than about 5 minutes you're likely to hear how you can save a life in Africa with mosquito nets for less than $10k.
Clearly money can buy lives, but GP needs to justify why they are using the USDOT numbers rather than some other number.
1: https://www.transportation.gov/office-policy/transportation-...*
Sentencing guidelines actually are based on the amount. I just don't think it is linear.
Last, in reality, it isn't just about the number, but the harm done. Stealing a penny from 300 million people is very different than stealing 3 million from one person in terms of impact.
> Stock options had long been a major part of the Sierra compensation package, so most employees and former employees were affected by the overnight collapse in Cendant’s share price, and its continued fall. “I had a fair amount of my net worth at the time tied up in that stock,” says Mike Brochu. “Holy crap, it just plummeted to nothing.” Leslie Balfour, a writer and producer at Sierra until late 1997 saw her stock fall from $100,000 to $20,000. Al Lowe says he and his wife lost “the equivalent of a really nice home.”
...
> Less fortunate were the Sierra employees who’d borrowed on their stock options to buy houses, whose banks called in their loans when the stock fell and had to declare bankruptcy. “One of my employees,” Bowerman says, “went from being on paper a millionaire to being hundreds of thousands in debt with no way of payment. There were just dozens of horror stories like that.”
> “To this day,” he writes, “I am only 99% convinced that Walter was a crook. It remains unimaginable to me.”
There's a quote in there where one of his employees likens him to Donald Trump. Found that interesting.
It's a reaaaaaally long article.
A lot of journalism is written inverted pyramid style with the most important facts at the top. This piece was more like a long form investigative piece, which is fine, but without a very engaging hook at the start. It was a lot of fluff and exposition... I think I prefer bullet points for something like this, but to each their own.
Bad writing? Maybe the article was edited or processed to show more ads?
I think many journalists really want to be novelists though, and it shows.
It's a lot clearer with the new title but it sure makes for some confusing threads.
Not sure about any summer camp stuff. Was that a lesser known part of their business? Or a different company?
I know this came after Meridian 59 and Everquest but I think it was before Ultima Online. Spent my elementary days playing it. I bet a lot of the players have passed on by now. I was (rule-breakingly) about 30+ years younger than everyone.
edit: Oh, 1996. I guess it was right when UOs alpha/beta came out. Wild. That definitely ate its lunch.
IIRC The Realm was a one time purchase whereas I needed my dads cc for UO... so that was limiting.
Other way around: On-Line Systems -> Sierra Online -> Sierra Entertainment.
It was originally founded as On-Line Systems, then Sierra On-Line in its heyday, then Sierra Entertainment after the dust settled.
I was a huge Sierra fan back in the day, and subscribed to their monthly magazine and constantly received promotional material from them. I never heard of any summer camp.